Cycle2Work: getting round the £1000.00 limit.

[rvw]

The real fly in the ointment in terms of paying extra yourself is that, legally, the bike belongs to your employer and they have no obligation to sell it to you at the end of the agreement. It is a risk you just have to take, based on your own knowledge of your employer.

 

[billy1561]

That's not correct. As long as you insure it for the correct amount you will be covered. For example if you bought your house for twenty grand thirty years ago, you must insure it for it's current value not what you paid for it.

I stand corrected. I was thinking for a lot of claims the insurers want the original receipt.

 

[400bhp]

@middleagecyclist: the safest thing to do is ask the particular shop what their policy is.

Then ask them again a few weeks later.

You don't want to be left with a voucher that, for all intents and purposes, you can't use.

 

[Paul99]

I stand corrected. I was thinking for a lot of claims the insurers want the original receipt.

The receipt thing is usually just to prove ownership. i.e. you not claiming for a Pinarello when all you actually had was a Triban. Most policies work on a new for old basis aswell so if you have had an obsolete model stolen then they will get you the nearest to it in the current models. Where you really need to keep receipts is where you have upgraded your components and accessories, as otherwise you will only get what was originally on the bike or the closest to it.

 

[vickster]

When my bike was stolen, the insurance company required the receipt. I had to get a copy from the LBS where bought

 

[middleagecyclist]

@middleagecyclist: the safest thing to do is ask the particular shop what their policy is.

Then ask them again a few weeks later.

You don't want to be left with a voucher that, for all intents and purposes, you can't use.

Already asked. Need to speak to the boss but given the impression all things are possible

 

[middleagecyclist]

You have it wrong. They can only supply a voucher at the total amount £1,000. That doesn't mean the purchaser can't add more on top.

The scheme provider (Bikes for the NHS) informed me the limit is £1000.00 and that has to be the max quoted value of the bike. As the employer owns it for the initial period they must own all of it. Paying extra for upgrades, etc. is therefore not allowed!

Of course my employer is never even going to see my bike never mind bother what I do with it or how i use it (although I will do some work commuting on it no doubt).

 

[Norm]

I'm not sure that I'd sink £500 into an asset of my employers, and then have to pay tax on the depreciated value of that £500 to transfer it into my name.

 

[400bhp]

I'm not sure that I'd sink £500 into an asset of my employers, and then have to pay tax on the depreciated value of that £500 to transfer it into my name.

Technically perhaps.

But what's to stop someone handing back a bike of equivalent value of the voucher?

 

[shouldbeinbed]

Very grey area. you're leasing the bike on the assumption not the obligation that your employer will sell it to you at the end of the period and now with HMRC taking a far more pro-active stance on interpreting FMV, you could be leasing 'their' the bike for up to 4 years to be 'sold' it for free.
If they decide not to sell it to you, or the company goes bust and the bike is considered an asset of theirs or you leave the firm/scheme etc then you've mosst likely lost your on top payment as to make a fuss about it would open you to accuations of fraud & dishonesty - not good attributes in an employee!

That said, I paid £300 up front so the *ahem* sale price was £1000 for the application form.

 

[middleagecyclist]

Very grey area. you're leasing the bike on the assumption not the obligation that your employer will sell it to you at the end of the period and now with HMRC taking a far more pro-active stance on interpreting FMV, you could be leasing 'their' the bike for up to 4 years to be 'sold' it for free.
If they decide not to sell it to you, or the company goes bust and the bike is considered an asset of theirs or you leave the firm/scheme etc then you've mosst likely lost your on top payment as to make a fuss about it would open you to accuations of fraud & dishonesty - not good attributes in an employee!

That said, I paid £300 up front so the *ahem* sale price was £1000 for the application form.

The chances of my employer going bust is essentially nil and I certainly do not plan to leave them in the near or medium future. As for them not wanting to sell it to me at the end I'll probably have to remind them I owe some money on it!

I do realise the scheme is not as good as it was but as I am now paying higher rate tax the savings for me are not to be sniffed at. It also means the up front cost (my payment for...ahem...bike fitting) is not so big and the rest on the scheme is 12 months interest free without the hassle of applying for credit. What's not to like?